By Ayomide Otitoju
The Board of Directors has approved a $10 million trade finance transaction guarantee facility for Exim Bank Tanzania Limited to strengthen the country’s private sector and de-risk cross-border trade.
The African Development Bank (AfDB) said the facility will provide up to 100 percent guarantees to international confirming banks against non-payment risks, enabling Exim to unlock additional trade finance lines. The initiative is projected to support up to $60 million in trade transactions over the next three years.
By reducing Exim’s reliance on scarce foreign exchange collateral, the support will free resources for lending to local businesses engaged in intra-African and international trade.
“Trade finance is essential for Africa’s economic development, facilitating both domestic and international trade, boosting economic growth and promoting regional integration,” Lamin Drammeh, AfDB’s Head of Trade Finance, said following the approval.
Small and medium-sized enterprises (SMEs), which represent over 90 percent of Tanzanian businesses and contribute about a third of GDP, are expected to be major beneficiaries. Tanzania faces an annual trade finance gap of about $1.3 billion, which continues to constrain SME growth.
Jaffari Matundu, Chief Executive Officer of Exim Bank Tanzania, welcomed the facility, noting that it would “remove barriers to cross-border trade while opening doors for new partnerships with global and regional financial institutions.”
The initiative will particularly support key sectors such as agriculture, health, energy, and manufacturing by enabling imports of fertilizer, pharmaceuticals, and farming equipment, alongside the export of Tanzanian commodities including coffee, cashew, and cotton.
Exim Bank, Tanzania’s fourth-largest lender with operations in Uganda, Djibouti, and Comoros, will implement the program in collaboration with participating confirming banks.
The project aligns with AfDB’s 2024–2033 Ten-Year Strategy, Tanzania’s 2021–2025 Country Strategy Paper, and the government’s Vision 2025, which emphasize improved access to finance, private sector-led job creation, and a globally competitive economy.
“This partnership with Exim Bank Tanzania demonstrates the African Development Bank Group’s commitment to reducing Tanzania’s trade finance gap, empowering local businesses to compete globally and create more jobs across the country,” Drammeh added.
